Morning Agenda: SoFi Chief Executive to Step Down

Mike Cagney, the co-founder and chief executive of Social Finance, is to step down from the online lender by the end of the year.

The financial technology start-up known as SoFi, which has been accused of having a toxic office culture, joins a substantial list of companies grappling with cultural issues in the workplace.

Mr. Cagney wrote in a letter to employees that “the combination of HR-related litigation and negative press have become a distraction from the company’s core mission.”

• Several former employees said that Mr. Cagney had inappropriate relationships with SoFi employees. Mr. Cagney often overstepped personal and business boundaries, according to interviews with more than 30 people familiar with the company.

• In 2012, Mr. Cagney sent sexually explicit text messages to an executive assistant named Laura Munoz. The company and its board agreed to pay Ms. Munoz a $75,000 settlement. The same year, he also pursued a relationship with another employee.

• A spokesman for SoFi said that the board had investigated a dispute between Mr. Cagney and a former employee and found no evidence of a romantic or sexual relationship. The company reached a settlement after the investigation.

• A former employee of SoFi filed a lawsuit in August saying that he had witnessed female employees being harassed by managers and was fired after he reported it. The lawsuit did not initially name Mr. Cagney, but he was added later as a defendant and accused of “empowering other managers to engage in sexual conduct in the workplace.” SoFi said in September that it was investigating the allegations.

• Mr. Cagney may have been overaggressive in expanding the business, skirting risk controls and compliance rules, according to people with knowledge of the situation. The SoFi spokesman disputed this.

• There were also questions about one of its initial products. The company said it had raised $90 million in debt financing for one of the loan products that it sold to investors in 2012, but that financing never took place. The issue was brought to the board, which made no changes. SoFi eventually bought the loans back from investors.

• Employees who spoke to The Wall Street Journal also described a culture in which they felt pressure to work extra hours for fear of being fired. One said that Mr. Cagney would tell workers that if they weren’t waking up twice a week in a cold sweat, they weren’t working hard enough. These employees also described angry executives breaking furniture and throwing telephones.

These kinds of problems have been far from rare in Silicon Valley.

Venture capitalists have faced questions about their behavior toward women entrepreneurs, while accusations of sexual harassment and questions about business tactics have led to an exodus of senior leaders at Uber.

(The ride-hailing company, which recently appointed a new chief executive after a year of turmoil, is said to be closer to selling a stake to SoftBank, according to Recode.)

Is Hurricane Price-Gouging Despicable?

Advocates of the Milton Friedman school of free-market theory contend that anti-gouging measures discourage people from conserving goods or suppliers from bringing in goods exactly when demand is highest.

Take hotel rooms, for example.

If a hotel were to double the price of a room during an emergency, a family might choose to rent fewer rooms at the higher price, or they might choose to tough it out at home if their house were damaged but livable.

Either option would increase the supply of hotel rooms, making them available to those who most need them, argues Matt Swolinski, director of the Center for Ethics, Economics and Public Policy at the University of San Diego.

The arguments may make sense in theory, but when it comes to trying to protect those who can’t afford the most basic goods, they seem like an inhumane affront to our sensibilities, Andrew Ross Sorkin writes.

There could be even more insidious side effects of anti-gouging laws.

Tyler Cowen, an economics professor at George Mason University, warns that a black market could emerge. Customers could buy up valuable supplies and resell them at higher prices, or store employees could funnel scarce goods to friends and family.

Maybe the lesson is that during national emergencies — the ultimate distortion in daily economic activity — a free market can make the distortion worse.

The question remains: How can resources be made available to poor individuals and families in a fair way?

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• Tesla attracted questions of a different nature during Hurricane Irma. It enabled a free software upgrade for vehicles in the path of the storm, giving them as much as 40 extra miles of range to outrace the deluge. Some car owners cheered, but others criticized the company, saying it was kneecapping vehicle range under normal circumstances in pursuit of profit.

Senators Seek Answers on Equifax Breach

Leaders of the Senate Finance Committee have demanded more details from Equifax about the data breach that may have compromised sensitive information of about 143 million people.

The committee’s leaders asked for a timeline of the breach, pushing for specifics on when three executives, who sold shares worth almost $1.8 million after the breach was discovered, were notified of the problem.

The Wall Street Journal also reported that Equifax had been lobbying lawmakers and federal agencies to ease regulation of credit-reporting companies before the data breach. It had lobbied to limit the legal liability of these companies, among other issues.